Critical illness insurance is generally where an insurer will pay a lump sum if the policy holder suffers one of the illnesses defined in the policy documents.
These illnesses often include cancer, heart attack or stroke. With the advances in medical care more and more we are surviving rather than dying from such illnesses.
This means the traditional forms of insurance cover don’t provide a benefit on such an illness, even though the financial and emotional results on suffering a critical illness are quite severe.
This is why insurers have come up with a new form of insurance to cover families when a terrible illness could cause financial traumas.
Critical Illness insurance must be held by a policy holder outside superannuation as it doesn’t meet the legislative conditions to be paid through super.
Determining the lump sum required for your situation is the hard part. The premiums for this insurance are quite high as the chances of being paid under the policy are a lot higher than other forms of insurance. Therefore it is a balance of cost verses need.
Many advisers like to look at covering debt, health costs and perhaps replacing income for a short term depending on other insurances taken out.
The amount of cover is dependent upon your situation, if you have debt, other insurances etc. The cost also means that some people will have to look at self-insuring themselves on parts of their needs so the premium is not unaffordable.
As part of a suite of insurances this cover is a very important cog, for young and old.
If you want to discuss your requirements or require assistance accessing this style of insurance the staff at Ritchie Advice would be more than happy to help so always feel free to give our office a call on 6234 1488.
This advice may not be suitable to you because it contains general advice which does not take into consideration any of your personal circumstances. All strategies and information provided in this article is general advice only.
Ritchie Advice Pty Ltd ABN 12 150 128 448, is a Corporate Authorised Representative 408050 of Dover Financial Advisers Pty Ltd, Australian Financial Services Licensee No. 307248.
Erin Gourlay
